Forex News: Pound Weakens On U.S. Tariff Threat

Pound Weakens On U.S. Tariff Threat

05/01/2020 - 07:27:00 (RTTNews)

(RTTNews) - The pound depreciated against its major counterparts in the European session on Friday, as US-China trade woes intensified after U.S. President Donald Trump threatened to impose tariffs against China over the coronavirus crisis.

Trump said on Thursday that he is confident the new coronavirus emerged from an infectious diseases lab in China.

But Trump refused to give details on what made him reach that conclusion.

Trump indicated that Beijing's role in the origin and spread of the coronavirus was taking priority than the initial trade deal reached last year.

U.K. stocks fell at the end of the trading week, with coronavirus worries and weak earnings updates from the likes of Apple and Amazon weighing on sentiment.

Prime Minister Boris Johnson declared that the U.K. was officially past the peak of coronavirus infections - but asked people to continue to comply with lockdown restrictions.

Final survey data from IHS Markit and Chartered Institute of Procurement & Supply showed that UK manufacturing activity contracted the most on record as the outbreak of coronavirus, or covid-19, pandemic caused substantial disruptions in the sector.

The manufacturing Purchasing Managers' Index fell to 32.6 in April from 47.8 in March. The flash reading was 32.9.

Data from the Bank of England showed that UK mortgage approvals declined to a seven-year low in March as measures to contain the spread of coronavirus started to affect housing market.

Mortgage approvals fell to 56,161 in March from 73,674 in February. This was the lowest level since March 2013 and below forecast of 60,000.

The pound fell to 1.2533 against the greenback, from a high of 1.2600 seen at 6:00 pm ET. Next key support for the pound is seen around the 1.22 mark.

The pound edged lower to 133.96 against the yen, after rising to 135.08 at 8:00 pm ET. If the pound falls further, 131.00 is likely seen as its next support level.

The pound slipped to a 2-day low of 1.2072 against the franc from Thursday's closing value of 1.2155. The next key support for the pound is seen around the 1.17 mark.

The pound declined to 0.8757 against the euro, its lowest level since April 24. The pound is seen finding support around the 0.89 level.

Looking ahead, U.S. ISM manufacturing index for April and construction spending for March are scheduled for release in the New York session.